WEBVTT - Santander’s Ana Botín, Reality of Quantum Computing, Netherlands Pension Reform, Data Center Win-Win 0:00:12.920 --> 0:00:15.960 This is Wall Street Week. I'm David Weston, bringing you 0:00:16.120 --> 0:00:20.840 stories of capitalism playing dice with the universe, the strange 0:00:20.920 --> 0:00:24.160 new world of quantum computing and how it may change 0:00:24.239 --> 0:00:28.480 our lives even more than AI plus, coming to terms 0:00:28.480 --> 0:00:32.560 with growing older and lower interest rates as Western nations 0:00:32.600 --> 0:00:35.720 face growing problems providing for the elderly. We take a 0:00:35.720 --> 0:00:38.440 look at the largest set of pension assets in Europe 0:00:38.560 --> 0:00:41.479 and why the Dutch are changing the way they invest 0:00:41.520 --> 0:00:46.199 those assets and turning concerns about data center energy consumption 0:00:46.360 --> 0:00:49.400 into a way to heat our houses. That's what they're 0:00:49.440 --> 0:00:53.160 doing in Finland. But we start with banking and how 0:00:53.240 --> 0:00:56.480 regulators in Europe and the United States are taking increasingly 0:00:56.520 --> 0:01:02.240 different approaches, creating both opportunities and challenges for Annaboutem, executive 0:01:02.280 --> 0:01:07.880 chairman of Spain's leading bank, Santander Bacos. Santander has had 0:01:08.000 --> 0:01:11.080 a big year. Give us a sense of how big 0:01:11.080 --> 0:01:11.960 a year it's been. 0:01:12.480 --> 0:01:15.319 It's been a great year. Our numbers will be totally 0:01:15.400 --> 0:01:17.520 on track to deliver all the numbers in our three 0:01:17.600 --> 0:01:20.280 year plan, and again in twenty five we're going to 0:01:20.319 --> 0:01:24.520 reach our profitability sixteen and a half percent. And for shareholders, 0:01:24.680 --> 0:01:29.680 you know great value creation, increasing different per share. Our 0:01:29.720 --> 0:01:32.600 share price is up one hundred percent, but there's still 0:01:32.640 --> 0:01:35.800 a lot of inherent value in our stock. Our multiples 0:01:35.840 --> 0:01:38.560 are still very attractive compared to US banks. For example, 0:01:38.560 --> 0:01:42.520 we're training a bit under ten times price earnings, and 0:01:42.600 --> 0:01:45.320 we deserve a premium to Europe and I would say 0:01:45.360 --> 0:01:48.680 even to the US banks because our profitability is getting 0:01:48.720 --> 0:01:50.640 better and we have growth. 0:01:50.920 --> 0:01:53.120 What were the main drivers of the success you've had 0:01:53.240 --> 0:01:53.720 this year? 0:01:54.760 --> 0:01:57.600 So I say it's an overnight success, ten years in 0:01:57.640 --> 0:02:01.480 the making. So since I took over inherited a group 0:02:01.520 --> 0:02:05.480 of banks, it was a big bank, but many different geographies, 0:02:05.520 --> 0:02:10.360 different business models, very disconnected and the whole vision is 0:02:10.400 --> 0:02:12.720 to bring them all together and they are a single, 0:02:12.960 --> 0:02:16.079 open financial services platform and that's what we have been 0:02:16.120 --> 0:02:19.240 working on. So this year, every single one of our 0:02:19.280 --> 0:02:23.400 five businesses is growing. We have simplified the organization. We 0:02:23.520 --> 0:02:27.960 sold Poland we bought in the UK, so UK business 0:02:28.000 --> 0:02:32.800 now is at scale and this is really the opportunity. 0:02:32.800 --> 0:02:36.079 At Santandre we have profitable growth for many years. 0:02:36.480 --> 0:02:40.440 Organically sometime there succeeded in selling half of its Polish 0:02:40.520 --> 0:02:44.360 unit this year, while other European banks, including UniCredit and 0:02:44.480 --> 0:02:49.200 BBVA had a tough time getting deals done. As you say, 0:02:49.280 --> 0:02:52.600 you sold Poland, you bought in the UK. There were 0:02:52.680 --> 0:02:55.280 other banks in Europe that tried to do transactions this 0:02:55.360 --> 0:02:57.720 year that didn't go so well. How come you got 0:02:57.760 --> 0:03:00.440 it done well? Y? 0:03:00.480 --> 0:03:03.040 You know, the stale of Poland was the largest cross 0:03:03.040 --> 0:03:07.160 border m and A in Europe in a decade. And 0:03:07.919 --> 0:03:11.960 in today's world, where governments defend their countries and you know, 0:03:12.040 --> 0:03:15.760 regulation is what it is, friendly deals are the way 0:03:15.760 --> 0:03:18.040 to go. And so I believe that's a secret. 0:03:19.040 --> 0:03:21.639 As you say, bacosana there as you inherit it is 0:03:21.639 --> 0:03:24.800 pretty far flung. I mean, you've got obviously Spain, you've 0:03:24.840 --> 0:03:28.360 got Europe, You've got UK, you've got US, Mexico, Brazil. 0:03:29.320 --> 0:03:33.040 How much is that helping baccos on there? That diversification. 0:03:34.040 --> 0:03:38.600 So in today's economy, either you're large and you have 0:03:38.640 --> 0:03:41.960 global scale, or you're very specialized and we have the scale. 0:03:42.160 --> 0:03:43.960 We're one of the largest banks in the world by 0:03:44.000 --> 0:03:46.280 number of customers one hundred and eighty million. That's more 0:03:46.320 --> 0:03:48.920 than the number one and number two bank in the 0:03:49.000 --> 0:03:53.040 United States together. We have added sixty million customers in 0:03:53.040 --> 0:03:55.760 the last ten years. And so you know that scale 0:03:56.680 --> 0:03:59.560 t to benefit from that scale, to have the operating leverage, 0:03:59.600 --> 0:04:02.760 you need to work across the company. You cannot just 0:04:02.840 --> 0:04:06.440 work separately by business or by geographies. 0:04:07.000 --> 0:04:09.720 One of your goals has been efficiency increasing the Efficiency Bank. 0:04:09.960 --> 0:04:12.760 How much success have you had, how much further can 0:04:12.760 --> 0:04:13.240 you take it? 0:04:13.480 --> 0:04:16.320 We're only just scratching the surface of our potential as 0:04:16.320 --> 0:04:19.120 a group. We have gravity, our cooperating system. We have 0:04:19.160 --> 0:04:24.320 our payments core system, which is allowing us to reduce 0:04:24.480 --> 0:04:27.240 cost per transaction in the last few years by a third. 0:04:27.839 --> 0:04:30.040 What is now coming is what you as a customer 0:04:30.080 --> 0:04:31.880 are going to see, which is the Open Bank. The 0:04:31.920 --> 0:04:35.640 front end this year will have flat to downcost and 0:04:35.720 --> 0:04:39.159 growing top line and this should continue into the next 0:04:39.160 --> 0:04:43.040 few years. And again organically, you know, we are in 0:04:43.160 --> 0:04:45.960 markets with one point two one point three billion people 0:04:46.240 --> 0:04:49.080 where we are at scale in each one of them, 0:04:49.240 --> 0:04:54.000 and building our own platforms is something that very few banks, 0:04:54.320 --> 0:04:56.080 very few companies have in the world today. 0:04:56.720 --> 0:05:01.360 One of Santantaier's strongest verticals is it's auto business, working 0:05:01.400 --> 0:05:04.920 with dealerships at fourteen thousand points of sale as well 0:05:04.920 --> 0:05:07.400 as through its digital platform Open Bank. 0:05:08.360 --> 0:05:12.040 The last two years delinquencies were very low during COVID 0:05:12.279 --> 0:05:16.080 have normalized, so they have been going up. But our 0:05:16.120 --> 0:05:19.880 final loss rate is actually stable over the last twelve months, 0:05:20.520 --> 0:05:24.880 and consumers are actually you know, getting up to date 0:05:24.920 --> 0:05:27.119 on their loans even though they get a bit behind. 0:05:27.160 --> 0:05:30.760 So the loss rates are stable and we're not seeing 0:05:31.160 --> 0:05:34.000 anything right now that tells us the US consumer on 0:05:34.120 --> 0:05:37.760 average at least is having any issues. It's very solid. 0:05:38.839 --> 0:05:41.560 We see interest rates coming down in Europe. Now what 0:05:41.600 --> 0:05:44.320 does that do to your bank and the banks generally. 0:05:45.279 --> 0:05:49.359 So the way the terminal rate and you know, we 0:05:49.400 --> 0:05:51.839 can have a debate about what that is in Europe 0:05:52.040 --> 0:05:54.400 or in the US, given the size of a level 0:05:54.440 --> 0:05:59.600 of government debt, given demographics, defence, spending, deg organization. You know, 0:05:59.640 --> 0:06:02.720 we don't see that rate being below two percent in Europe, 0:06:02.920 --> 0:06:05.479 probably below three in the United States something like that. 0:06:06.240 --> 0:06:08.799 And that is a very good level for banks because 0:06:09.960 --> 0:06:11.960 it is high enough for us to have a margin, 0:06:12.080 --> 0:06:15.719 but not that high that the credit gets bad. Rates 0:06:15.760 --> 0:06:19.279 are at a level that I think will allow growth 0:06:19.320 --> 0:06:23.200 to remain around three percent globally right now. By the way, 0:06:23.240 --> 0:06:26.120 that's not fast enough, but at least we're growing. 0:06:26.800 --> 0:06:30.400 Regulation maybe one thing holding down growth in Europe. In 0:06:30.440 --> 0:06:34.040 the last six years, the EU has added thirteen thousand 0:06:34.200 --> 0:06:37.560 new banking rules. Well, the US came up with only 0:06:37.640 --> 0:06:41.560 thirty five hundred. Give us your sense of regulation of 0:06:41.560 --> 0:06:44.120 banks in Europe versus the United States. 0:06:44.360 --> 0:06:48.000 Well, I think regulation, like life, is all about balance, right, 0:06:48.560 --> 0:06:52.599 and so we do believe in smart regulation. But we've 0:06:52.640 --> 0:06:56.720 gone way too far on certain items like capital. You know, 0:06:57.360 --> 0:07:00.400 soundless of banks doesn't just depend on capital, as we've seen. 0:07:00.880 --> 0:07:02.440 You know, if you look at the capital ratios of 0:07:02.520 --> 0:07:04.559 some of the banks that had problems, sore pretty high. 0:07:05.000 --> 0:07:07.640 And so we think against santandrev look at our CDs, 0:07:07.640 --> 0:07:09.320 it's one of the best in the world, including the 0:07:09.360 --> 0:07:11.480 best banks in the United States. Why because it's about 0:07:11.520 --> 0:07:16.120 a strong balance sheet, liquidity, you know, scale, business model, 0:07:16.280 --> 0:07:20.920 et cetera. So you know, we have gone as far 0:07:21.000 --> 0:07:22.800 as I think we need to go on capital, and 0:07:22.840 --> 0:07:24.960 now we need to be supporting growth. 0:07:25.720 --> 0:07:28.680 Mario Dragging came out with a famous report. What's been 0:07:28.720 --> 0:07:29.480 done with that report? 0:07:29.600 --> 0:07:32.240 So the ambition is very high. Even if you don't 0:07:32.280 --> 0:07:34.440 get to that, you're going to do pretty big things. 0:07:34.480 --> 0:07:36.040 And so this is the thing in Europe. What is 0:07:36.080 --> 0:07:41.080 our ambition for growth. Maria Dragi gave us a diagnosis. 0:07:41.160 --> 0:07:43.920 How much have we executed? Not more than ten percent 0:07:44.120 --> 0:07:46.480 in one year. So we have to have a much 0:07:46.520 --> 0:07:52.960 greater ambition on delivering on those recommendations. I've said it publicly. 0:07:53.240 --> 0:07:57.720 You know, if taxes every euro we make in Europe 0:07:58.120 --> 0:08:02.200 fifty eight cents go to the government, every dollar we 0:08:02.280 --> 0:08:04.040 make in the United States forty two, that's not a 0:08:04.080 --> 0:08:09.080 small number, but it's you know, significantly lower. So excess regulation, 0:08:09.800 --> 0:08:14.520 excess taxation actually is a tax on the economy and growth. 0:08:14.560 --> 0:08:17.680 At some point people don't invest, and so this is 0:08:17.720 --> 0:08:21.360 the balance we need to find. And Europe is getting 0:08:22.000 --> 0:08:25.120 further apart from the United States not coming closer. 0:08:26.040 --> 0:08:29.040 We also have regulation of banks at both the European 0:08:29.120 --> 0:08:32.840 level and member state level. To what extent do member 0:08:32.880 --> 0:08:33.679 state whole things back? 0:08:33.880 --> 0:08:36.000 Well, and there's one thing you didn't mention. So there's 0:08:36.040 --> 0:08:38.959 the regulation, and then that's the level two and three. 0:08:39.520 --> 0:08:40.959 Here in the United States, there's a lot of talk 0:08:41.000 --> 0:08:44.120 about the agencies. Clearly there's work to do in the 0:08:44.160 --> 0:08:47.120 United States. In Europe there's even much more work to do, 0:08:47.280 --> 0:08:51.640 right and I show at a conference on regulation only 0:08:51.679 --> 0:08:55.440 financial services regulation without the rest of the interpretation of 0:08:55.480 --> 0:08:59.680 the rules, which is thousands more ninety seven thousand lines, 0:08:59.720 --> 0:09:03.840 which a hundred don quixotes. You know, I showed it there, 0:09:04.040 --> 0:09:06.800 and so that is a second level. And then the 0:09:06.840 --> 0:09:10.200 third is what you say, which is the national rules 0:09:10.400 --> 0:09:11.520 and regulations. 0:09:11.920 --> 0:09:14.760 How do you decide how to allocate your capital for 0:09:14.960 --> 0:09:18.199 growth and to what extent is it affected by things 0:09:18.240 --> 0:09:21.400 like the relative different in regulatory levels. 0:09:21.880 --> 0:09:25.319 Well, that of course matters a lot, right if other 0:09:25.360 --> 0:09:28.640 things equal, every dollar I put in Europe, you know 0:09:28.760 --> 0:09:31.160 fifty eight of the profit goes to the state and 0:09:31.200 --> 0:09:34.680 forty two in the United States, Well, you know Europe 0:09:34.720 --> 0:09:37.319 is going to have to give me higher growth or 0:09:37.360 --> 0:09:40.000 higher profitability of both for us other things equal to 0:09:40.040 --> 0:09:43.560 go there. So yes, it matters a lot. 0:09:44.840 --> 0:09:49.120 There's innovation and creativity in Europe, entrepreneurship in Europe. Do 0:09:49.200 --> 0:09:50.480 the capital market support it. 0:09:50.960 --> 0:09:52.720 We have been pushing for a long time for capital 0:09:52.760 --> 0:09:55.920 markets union. We now have the Savings Union, which is 0:09:56.720 --> 0:10:00.880 not exactly the same, but it's gonna be helpful. The 0:10:01.000 --> 0:10:06.160 reality is that most of SME commercial lending comes from banks, 0:10:06.200 --> 0:10:09.760 and that is why it's so existential and urgent that 0:10:09.800 --> 0:10:14.360 we increase the ambition for change, because we will only 0:10:14.920 --> 0:10:17.760 be more competitive if there's more investment. This is coming 0:10:17.760 --> 0:10:20.440 from smaller, medium sized companies and a lot of that 0:10:20.559 --> 0:10:22.839 lending comes from the banks, and that's why capacity to 0:10:22.920 --> 0:10:27.720 lend has to expand. And that is what you know. Again, regulation, 0:10:28.480 --> 0:10:31.600 smart regulation would be very helpful. 0:10:32.120 --> 0:10:35.679 Is there any prospect of a unified banking regulatory system 0:10:35.720 --> 0:10:37.359 in Europe? 0:10:38.160 --> 0:10:40.640 Well, you know how many years did it take to 0:10:40.679 --> 0:10:44.360 build the United States two hundred Europe we've been going 0:10:44.360 --> 0:10:47.680 at this for fifty or sixty years, so it will happen. 0:10:48.320 --> 0:10:49.440 I'm not sure I will see. 0:10:49.320 --> 0:10:53.199 It coming up. We try to make sense of something 0:10:53.240 --> 0:10:56.760 that Einstein threw up his hands, trying to understand quantum 0:10:56.840 --> 0:11:00.200 mechanics and the revolution it may bring to computing by 0:11:00.240 --> 0:11:15.360 doing some things better than AI. This is a story 0:11:15.360 --> 0:11:19.679 about God playing dice with the universe, something Albert Einstein 0:11:19.720 --> 0:11:22.560 told us he didn't do. Back in nineteen twenty six, 0:11:23.120 --> 0:11:27.960 Einstein was criticizing physicists theory of quantum mechanics. Yet a 0:11:28.080 --> 0:11:32.160 century after Einstein's denial, billions of dollars are being invested 0:11:32.200 --> 0:11:36.199 today in taking that theory and turning it into reality, 0:11:36.600 --> 0:11:40.080 with the prospect of a revolution in computing, potentially larger 0:11:40.200 --> 0:11:42.000 even than generative AI. 0:11:43.960 --> 0:11:47.800 Quantum computing is very high potential Inbastors are increasingly asking 0:11:47.920 --> 0:11:50.640 us about the implications of quantum. 0:11:50.240 --> 0:11:55.840 Computing, quantum computing, quantum computing, political and state level economic 0:11:55.880 --> 0:11:58.600 supports to develop quantum and we want to be part 0:11:58.679 --> 0:11:58.880 of that. 0:12:00.240 --> 0:12:03.000 IBM is one of the companies leading the charge in 0:12:03.160 --> 0:12:04.160 quantum computing. 0:12:04.679 --> 0:12:07.719 Not IBM, we developed some of the very foundations of 0:12:07.800 --> 0:12:11.160 quantum information science starting as early as nineteen seventy. 0:12:11.520 --> 0:12:15.479 Jamie Garcia is the Director of Quantum Partnerships at IBM. 0:12:15.720 --> 0:12:20.240 A PhD chemist, she's working on quantum computers transforming healthcare 0:12:20.520 --> 0:12:22.480 at places like the Cleveland Clinic. 0:12:22.760 --> 0:12:27.040 Quantum computers are just a totally different paradigm to calculate 0:12:27.080 --> 0:12:32.040 solutions to problems, and so what most experts have done 0:12:32.440 --> 0:12:36.839 today that are studying quantum computing for different application spaces 0:12:37.240 --> 0:12:40.040 is to really sit down with the math and figure out, like, 0:12:40.120 --> 0:12:42.880 are the algorithms here that I can use and that 0:12:43.040 --> 0:12:45.840 I can exploit using a quantum computer going to bring 0:12:45.880 --> 0:12:49.280 me any sort of advantage over what can be done 0:12:49.320 --> 0:12:52.959 today in classical sort of state of the art techniques. 0:12:54.400 --> 0:12:58.280 At the core of classical computing are bits, single pieces 0:12:58.280 --> 0:13:01.440 of information that can have the value of zero or one, 0:13:02.160 --> 0:13:06.400 But quantum technology relies on cubits, a unit that can 0:13:06.440 --> 0:13:10.760 have multiple values simultaneously. It's like holding a coin in 0:13:10.800 --> 0:13:14.160 your hand that is heads, tails and everything in between 0:13:14.600 --> 0:13:18.640 until you open your hand to check. Physicist Jerry Chow 0:13:18.880 --> 0:13:22.240 is IBM's director of Quantum Hardware System Development. 0:13:22.880 --> 0:13:26.880 Really fundamentally, there's a different math, right's the mathematics of 0:13:27.000 --> 0:13:32.679 quantum mechanics that is governing how you actually manipulate these 0:13:32.920 --> 0:13:36.400 quantum bits, which then gives rise to a whole host 0:13:36.440 --> 0:13:41.520 of different opportunities for algorithms and types of problems that 0:13:41.559 --> 0:13:43.320 you can actually solve using quantum muters. 0:13:43.520 --> 0:13:47.160 As we're studying things today, we're using a lot of 0:13:47.160 --> 0:13:50.640 something called error mitigation as our approach to dealing with 0:13:50.800 --> 0:13:53.439 errors and ways in the system and in the quantum 0:13:53.480 --> 0:13:57.240 computer itself. This is going to continue to evolve. In fact, 0:13:57.320 --> 0:13:59.640 we think that next year we're going to see examples 0:13:59.720 --> 0:14:02.520 of what we call quantum advantage, which is where you're 0:14:02.600 --> 0:14:05.160 able to come up with a solution to a problem 0:14:05.400 --> 0:14:09.680 that is cheaper, faster, or more accurate than with classical alone. 0:14:10.559 --> 0:14:13.920 A turning point in IBM's efforts to make quantum computing 0:14:13.960 --> 0:14:16.880 a reality came when it made it available to the 0:14:16.920 --> 0:14:18.040 world on the. 0:14:17.960 --> 0:14:19.480 Cloud twenty sixteen. 0:14:19.760 --> 0:14:23.440 The IBM Quantum Experience was really a pivotal moment for 0:14:23.600 --> 0:14:28.000 us in terms of getting quantum computers for the first 0:14:28.000 --> 0:14:32.200 time out onto the cloud and into the hands of anybody, 0:14:32.520 --> 0:14:36.000 really people. Right. What's interesting is that before that period, 0:14:36.120 --> 0:14:39.280 I'd say, it was really much more in the realm 0:14:39.360 --> 0:14:44.280 of physics, right that we were doing experiments on small devices, 0:14:44.360 --> 0:14:47.760 cubit devices that we were looking at, understanding how they worked, 0:14:47.920 --> 0:14:51.600 trying to make them better, but we didn't have any 0:14:51.680 --> 0:14:54.480 kind of real thought about how is this going to 0:14:54.480 --> 0:14:55.480 be used for computation. 0:14:55.960 --> 0:14:59.080 In the nine years since you put Quantum Experience out there, 0:14:59.160 --> 0:15:01.480 what is what have you learned at IBM? 0:15:01.720 --> 0:15:04.160 I think what I learned from that experience really was 0:15:04.240 --> 0:15:07.520 that there was a whole lot of people out there 0:15:07.520 --> 0:15:10.520 who wanted to touch and learn about quantum. I think 0:15:10.520 --> 0:15:12.720 we were sitting there that first night after we launched it, 0:15:12.800 --> 0:15:16.840 watching these circuits coming in and people were actually running things, 0:15:16.880 --> 0:15:18.920 and we were like, oh wow, this is picking up 0:15:18.920 --> 0:15:22.160 some steam here. And then you know, to this point, 0:15:22.200 --> 0:15:25.040 we've had tremendous uptake in terms of using the platform 0:15:25.080 --> 0:15:29.280 to actually generate new papers and research. Thousands of papers 0:15:29.280 --> 0:15:31.480 have been generated which have been would have been impossible 0:15:31.480 --> 0:15:34.480 for us to do, just as individual scientists or researchers 0:15:34.480 --> 0:15:37.120 studying these devices in our own lab and working with 0:15:37.480 --> 0:15:40.280 other scientists and collaborations, and. 0:15:40.320 --> 0:15:44.360 In success, that community could go places that classical computing, 0:15:44.640 --> 0:15:48.080 even using the large language models of AI, could never 0:15:48.240 --> 0:15:51.840 take us. So it's not just speech, it's actual accuracy. 0:15:51.960 --> 0:15:56.080 When we're using classical no matter how infinite we get, 0:15:56.320 --> 0:15:57.960 it's an approximation. 0:15:57.480 --> 0:16:00.840 Right, Absolutely, it's absolutely not just not not a question 0:16:00.880 --> 0:16:03.520 about speed. The whole point of the quantum computer and 0:16:03.560 --> 0:16:05.360 what it can do is that it can give us 0:16:05.400 --> 0:16:08.560 the ability to actually get potentially more accurate results, also 0:16:08.880 --> 0:16:13.640 get results that otherwise are unattainable using a classical computer alone. 0:16:14.800 --> 0:16:18.800 Companies like Google, Microsoft, and Intel are all exploring the 0:16:18.800 --> 0:16:22.160 potential of quantum computing, but there's also a new group 0:16:22.160 --> 0:16:25.320 of contenders, startups that are betting it all on the 0:16:25.360 --> 0:16:28.920 hope that quantum tech will one day become profitable. One 0:16:28.960 --> 0:16:32.800 of those firms is Maryland based ion Q. Its CEO 0:16:33.000 --> 0:16:36.600 is Nicolo Demasi, who believes he has the best horse 0:16:36.760 --> 0:16:37.360 in the race. 0:16:38.120 --> 0:16:44.800 We supply quantum computers to both federal, state and commercial 0:16:45.200 --> 0:16:49.480 customer partners. We also provide quantum key distribution, and we 0:16:49.520 --> 0:16:52.560 do that both on the ground and up in the heavens. 0:16:52.680 --> 0:16:56.760 Quantum key dissolution is effectively quantum cyber security, and we're 0:16:56.840 --> 0:16:59.760 very focused on this not being just proof points in 0:16:59.760 --> 0:17:03.880 the lad lab, but doing useful quantum advantage examples for 0:17:03.960 --> 0:17:07.639 our customers and embedding ourselves into their workflows on an 0:17:07.680 --> 0:17:08.480 ongoing basis. 0:17:09.480 --> 0:17:11.760 So what will it look like as we go beyond 0:17:11.760 --> 0:17:15.560 showing so called quantum advantage in the lab and embedding 0:17:15.560 --> 0:17:19.439 it into real world workflows. One place people look to 0:17:19.640 --> 0:17:23.280 first is in the life sciences work like doctor Garcia 0:17:23.400 --> 0:17:25.080 is doing at the Cleveland Clinic. 0:17:25.480 --> 0:17:28.560 An example of something that we've done is we've taken 0:17:28.560 --> 0:17:31.879 in some of the algorithms that we've worked on for chemistry, 0:17:32.440 --> 0:17:37.040 and alongside Cleveland Clinic, we've started looking at different chemical 0:17:37.080 --> 0:17:40.360 processes that they really care about. So you can think 0:17:40.400 --> 0:17:45.240 about this in the larger context of therapeutics, design, drug discovery, 0:17:45.560 --> 0:17:47.679 that kind of thing, and really what we're doing with 0:17:47.720 --> 0:17:53.640 Cleveland Clinic is pushing the boundaries of algorithm development methodology 0:17:54.040 --> 0:17:59.280 of using quantum computers, again in concert with classical computers 0:17:59.600 --> 0:18:03.679 to come up with solutions to problems that they care about. 0:18:03.800 --> 0:18:08.720 Protein folding is definitely one area mRNA Secondary structure. Understanding 0:18:09.160 --> 0:18:12.840 how things come together and how they look in sort 0:18:12.840 --> 0:18:15.520 of three D is a very interesting area, as you 0:18:15.520 --> 0:18:18.520 can imagine as you're trying to understand how these things 0:18:18.600 --> 0:18:22.200 fit together in a biological system. 0:18:22.400 --> 0:18:25.719 It isn't just life sciences that could be revolutionized by 0:18:25.720 --> 0:18:29.959 the addition of quantum computing. Financial markets are another target 0:18:30.000 --> 0:18:34.040 of opportunity. IBM scored an early advantage this year when 0:18:34.240 --> 0:18:38.119 HSBC said it used the tech company's Heron quantum processor 0:18:38.480 --> 0:18:41.480 to make a thirty four percent improvement in predicting how 0:18:41.640 --> 0:18:44.040 likely a bond will trade at a given price. 0:18:44.320 --> 0:18:46.040 I think there's a lot of excitement in the market 0:18:46.160 --> 0:18:51.000 space as well right especially because optimization is certainly in 0:18:51.040 --> 0:18:54.160 another area which we know is a classically difficult problem, 0:18:55.040 --> 0:18:58.119 and from the point of view of actually using a 0:18:58.200 --> 0:19:01.000 quantum computer to address optimization, are many threads there in 0:19:01.119 --> 0:19:06.199 terms of leveraging this kind of large, exponentially computational space. 0:19:06.280 --> 0:19:11.840 To handle problems such as portfolio optimization right or risk management. 0:19:12.200 --> 0:19:15.040 So there's a lot of interesting ideas there that are 0:19:15.080 --> 0:19:17.080 being looked at by various financial institutions. 0:19:17.160 --> 0:19:20.760 What I can say at this stage is portfolio theory, 0:19:20.920 --> 0:19:24.879 options pricing. These are very much now accessible from a 0:19:24.920 --> 0:19:28.960 quantum advantage perspective using our new tempo system, quantum key 0:19:29.000 --> 0:19:33.320 distribution and cybersecurity that is of course front and center 0:19:33.359 --> 0:19:36.680 for financial services on a global basis, and so security 0:19:36.680 --> 0:19:39.639 and integrity of the data flow is of course vital. 0:19:40.440 --> 0:19:43.720 I always like to jokingly say that you can spot 0:19:43.840 --> 0:19:46.960 our quantum security customers because they are not in the 0:19:47.000 --> 0:19:48.720 news for data breaches. 0:19:49.600 --> 0:19:53.240 Even agriculture could benefit from quantum computing in ways we 0:19:53.359 --> 0:19:54.719 haven't yet imagined. 0:19:55.440 --> 0:20:00.480 Understanding processes such as nitrogen fixation to make things like 0:20:00.520 --> 0:20:03.680 better fertilizer right to help us grow better crops right, 0:20:04.480 --> 0:20:09.320 Understanding things that are critical in impacting climate change right 0:20:09.359 --> 0:20:13.920 and in terms of how carbon is handled right, other 0:20:13.960 --> 0:20:19.200 things including better batteries right in terms of materials discovery. 0:20:20.000 --> 0:20:23.399 The potential may be great, as are the investments being made, 0:20:24.000 --> 0:20:27.600 but when can we expect to see these potentially dramatic results. 0:20:28.240 --> 0:20:31.160 It turns out that that depends on whom you ask. 0:20:31.760 --> 0:20:34.640 IBM has made getting to quantum advantage in the real 0:20:34.680 --> 0:20:38.040 world a strategic priority and has a timeline of getting 0:20:38.119 --> 0:20:40.600 there in a big way by twenty twenty nine. 0:20:41.040 --> 0:20:44.080 Our roadmap really shows the detail in terms of how 0:20:44.160 --> 0:20:46.640 we want to get from today to twenty twenty nine. 0:20:47.240 --> 0:20:50.399 In between, we have this real important milestone also that 0:20:50.440 --> 0:20:53.080 we believe that with the community, we'll be hitting quantum 0:20:53.119 --> 0:20:57.200 advantage right where there will be some problems and claims 0:20:57.200 --> 0:21:02.880 of advantage where we'll see quantum really surpassing any classical 0:21:02.920 --> 0:21:06.520 methods of solving certain types of problems. Right, and we 0:21:06.680 --> 0:21:10.720 are looking at various ways of showing that academically, scientifically 0:21:10.800 --> 0:21:14.000 and also empirically from the ground up in terms of 0:21:14.080 --> 0:21:18.520 compared with various kinds of classical methods today. And then 0:21:18.720 --> 0:21:20.520 we're building a lot of the it's you know, it's 0:21:20.560 --> 0:21:24.280 in the end, it's like architecting a large skyscraper. We're 0:21:24.280 --> 0:21:27.399 building a lot of the foundational elements so that when 0:21:27.480 --> 0:21:32.400 we hit Starling and twenty twenty nine, all the applications 0:21:32.400 --> 0:21:35.360 that people have been developing, all the software stack, all 0:21:35.440 --> 0:21:39.399 the eventual software libraries, they're still going to work that 0:21:39.440 --> 0:21:42.280 they're going to work on a machine that's even more capable, 0:21:42.560 --> 0:21:46.080 something that can run hundreds of millions of gate operations 0:21:46.119 --> 0:21:49.280 compared to several thousands of gate operations on the on 0:21:49.359 --> 0:21:51.480 the advantage level machines that we're building today. 0:21:52.280 --> 0:21:55.240 IBM says it's on track to have quantum computing payoff 0:21:55.280 --> 0:21:58.399 in a big way by twenty twenty nine, but ion 0:21:58.520 --> 0:22:00.960 C's Demasi says they're already there. 0:22:01.400 --> 0:22:04.040 So our machines we announced on September twelfth at our 0:22:04.040 --> 0:22:08.800 Analyst Day are thirty six quadrillion times more powerful than 0:22:08.880 --> 0:22:13.359 anyone else's machine, and that gap is increasing. Not only 0:22:13.359 --> 0:22:15.639 do we believe we are five years ahead of anybody 0:22:15.680 --> 0:22:20.960 else in the quantum computing business, whether it's government programs, adversaries, 0:22:21.480 --> 0:22:25.400 or commercial companies, but we also have the lowest unit economics, 0:22:25.600 --> 0:22:29.080 so we're able to build a fully tolerant two million 0:22:29.119 --> 0:22:33.000 Cuba system and keep our cost of good souls under 0:22:33.040 --> 0:22:36.240 thirty million dollars. Taking that together, it means that we're 0:22:36.280 --> 0:22:40.000 a fully flagged quantum Internet solution. We can provide our 0:22:40.080 --> 0:22:45.399 customer as a platform of computing, cybersecurity, networking, communications and sensing, 0:22:45.880 --> 0:22:47.800 and there's no other company in the history of the 0:22:47.840 --> 0:22:51.080 world that's evering able to supply a complete quantum Internet. 0:22:51.880 --> 0:22:54.919 Everyone in the quantum business seems to agree that Einstein 0:22:55.160 --> 0:22:58.800 was wrong, that it's either coming soon or is already here, 0:22:59.240 --> 0:23:02.800 and that it will be big. But figuring out who's 0:23:02.840 --> 0:23:06.760 ahead in this race sometimes feels like predicting those dice. 0:23:07.240 --> 0:23:10.680 IBM says it's ahead because it has more total cubits 0:23:10.720 --> 0:23:14.080 in its machines. Ion Q says it's not the number 0:23:14.080 --> 0:23:17.560 of cubits, but the number of algorithmic cubits, putting it 0:23:17.720 --> 0:23:22.600 in front. And quantum company Continuum has yet a third 0:23:22.640 --> 0:23:25.800 measure of quantum value. Maybe we shouldn't be surprised that 0:23:25.840 --> 0:23:29.159 there isn't a single measurement. It's like those cubits that 0:23:29.200 --> 0:23:32.800 are both ones and zero's at the same time until 0:23:32.880 --> 0:23:36.320 they're observed. And it looks likely that we will all 0:23:36.359 --> 0:23:39.040 be able to observe what quantum computing can do for 0:23:39.119 --> 0:23:45.080 us in the very near future. Up next, an aging 0:23:45.160 --> 0:23:49.360 population meets lower interest rates. It's a problem countries throughout 0:23:49.400 --> 0:23:51.960 the West are facing. We tell the story of what 0:23:52.040 --> 0:24:08.359